New gender laws could see big companies stripped of government contracts. 

A legislative proposal by the Australian government places significant pressure on large corporations, including key players like BAE Systems, Microsoft, SAP, and leading consultancy and legal firms. 

The government initiative aims to attach billions of dollars in government contracts with the achievement of gender equality targets.

Entities employing over 500 individuals will soon be required to demonstrate adherence to gender equality benchmarks established by the Workplace Gender Equality Agency (WGEA) to compete for Commonwealth procurement ventures. 

Mary Wooldridge, WGEA's Chief Executive, says a shift is occurring from passive acknowledgment to active redressal of gender imbalances.

“It’s not enough for organisations to merely acknowledge their gender pay gaps – they must move from knowing better to doing better,” she said in a recent address. 

Recent scrutiny by WGEA unveiled a median gender pay gap of 19 per cent, with men earning significantly more than women. 

The agency's newfound authority aims to expose companies with a workforce exceeding 100 employees that fail to close these pay gaps.

The legislation proposes a “menu of options” for companies to set their gender targets, which could include measurable objectives such as diminishing the gender pay gap or increasing the representation of women in leadership roles. Firms will have three years to achieve these targets.

High-profile cases illustrate the urgency of these measures. 

SAP Australia and Microsoft, with government contracts worth $34.1 million and $44.7 million respectively since 2023, report gender pay gaps of 16.2 per cent and 9.7 per cent. 

Similarly, strategy giants McKinsey, Bain, and Boston Consulting Group report gaps of 38 per cent, 31 per cent, and 35 per cent, highlighting the widespread nature of the issue.

Even companies with relatively minor pay discrepancies, like Deloitte, PwC, KPMG, and EY, which collectively secured $1.2 billion in government contracts last fiscal year, are mandated to demonstrate progress in gender equality. 

BAE Systems, another major contractor with $930 million in government contracts since 2023, faces scrutiny for its gender pay gap and male-dominated workforce.

The government’s approach is reinforced by international standards set by the OECD and other global institutions, which advocate for using procurement policies to promote social objectives.